The online business of Hugo Boss, a German luxury fashion house, has climbed 26 per cent in the first quarter of fiscal 2019. In addition to double-digit growth of the group’s own online store, the further expansion of the concession model in the online business also contributed to the rise. However, sales in the wholesale business decreased, as expected.
In the first quarter, Hugo Boss increased currency-adjusted sales by 1 per cent to 664 mn euro. This corresponds to an increase in sales of 2 per cent in the reporting currency. However, there were significant regional differences. While in the Americas, the challenging US market and the ambitious comparison base of the prior year in particular led to a currency-adjusted sales decline of 8 per cent, currency-adjusted sales in Asia once again increased disproportionately, by 4 per cent. In Mainland China in particular, where Hugo Boss has recorded double-digit growth on a comp store basis, the momentum of previous quarters continued. In Great Britain, the group once again achieved double-digit retail sales growth, adjusted for currency effects. Business in Germany developed stable. In total, sales in Europe were up 2 per cent compared to the prior year.
In Europe, robust sales growth in the group’s own retail business was partially compensated by a decline in the wholesale business. The latter was negatively impacted by delivery shifts compared to the prior year. In Great Britain, Hugo Boss has recorded currency-adjusted sales growth of 5 per cent. Against the background of the ongoing challenging market environment in Germany, sales developed stable there. In the Benelux countries, sales were also at the prior year’s level. In France, sales growth in the group’s own retail business could not compensate for a decline in the wholesale business. Overall, sales in France were 7 per cent below the prior year level.
“The ongoing momentum in our strategic growth market China and in the important online business shows that our strategy is taking effect,” said Mark Langer, Chief Executive Officer of Hugo Boss. “At the same time, the US market proved to be weaker than expected. Moreover, investments in the digitization of our business model and in the organisational structure weighed on our operating result in the first quarter. However, they will help us to further accelerate important operational processes and to significantly improve our cost efficiency in the current year. I am very confident that we will achieve our targets for the full year and beyond.”
Hugo Boss continues to anticipate an increase in group sales in 2019 at a mid-single-digit percentage rate on a currency-adjusted basis. This forecast is based on the assumption that comp store and currency-adjusted retail sales will also increase at a mid-single-digit percentage rate in full year 2019.